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ACA Reporting Deadlines Extended with Good-Faith Transition Relief
By: Net at Work Team
This article was originally published on December 28, 2017. It was updated to reflect the 2019 extension for the 2018 filing year. On November 29, 2018, the IRS issued Notice 2018-94, extending the Affordable Care Act (ACA) 2018 deadline for providing individuals Form 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage. The notice also offers similar good-faith effort for 2018 as was available for 2017. This is an automatic 30-day extension from the original due date of January 31, 2019, and employers and providers don’t have to request it. Take note that the recent ruling does not impact reporting requirements for the 2018 tax year.
Reporting requirement 2019 deadline
Filing Forms 1095-B and 1095-C in paper format to the IRS February 28
Providing individuals Form 1095-B and/or 1095-C March 4
Filing Forms 1095-B and 1095-C in electronic format to the IRS April 1
Internal Revenue Code Section 6056 requires applicable large employers (ALEs) to file information returns with the IRS and provide statements showing whether or not they offered their full-time employees health insurance coverage. ALEs can satisfy this requirement by completing Forms 1094 and 1095. The annual ACA reporting is required regardless of whether or not an ALE offered health insurance coverage.
Good-faith effort was extended, but penalties may still apply. The extension of the good-faith effort relief applies to taxpayers who report incorrect or incomplete information if they can adequately demonstrate to the IRS that a good-faith effort was made to comply. However, the good-faith relief is not guaranteed, and many employers are facing large penalties for previous filing mistakes.
The IRS has stated that this relief does not apply to those who failed to provide or file a timely statement or return.
Individuals may file tax returns prior to receiving forms.
Because of these extensions, individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2018 individual income tax return. But taxpayers do not have to wait for the forms to file. While information on these forms may help with preparing a return, the forms are not required, and individuals can use other information about their health coverage to prepare their returns.
It should be noted that under the Tax Cuts and Jobs Act, the individual shared responsibility payment is reduced to $0 for individuals who fail to obtain health insurance effective January 1, 2019. However, the employer mandate and the ACA reporting requirements remain unchanged and employers are still required to comply.
ACA Preparation Checklist
Although the submission date for this year’s 1095’s has once again been extended by 30 days, it is important not to lose sight of the continuing requirement to report to employees their monthly eligibility for company paid health insurance. Here are some things to consider between now and the February 28, 2019 IRS filing deadline. For more details on preparing for ACA reporting, use this link to download our annotated ACA checklist.
Determine if you were an Applicable Large Employer (ALE) in 2018. According to the IRS, An ALE is an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. An ALE may be a single employer or may consist of a group of related employers (such as parent and subsidiary entities or other related/affiliated entities), called an Aggregated ALE Group.
Check reporting obligations if an ALE with self-insure group health plans.
ALE’s that offer fully insured group health plans or non-ALE that offer self-insured group health plans must file with the IRS, regardless of number of employees.
Determine electronic filing status.
Will you be filing 250 or more 1095 forms for 2018? If so, you must file electronically with the IRS. With Sage products in partnership with Aatrix, electronic filing is included with provision of paper copies mailed to employees (and an electronic copy for them as well).
Make sure employee Social Security information is up-to-date.
Although ACA reporting is not tied directly to the Social Security Administration, employees’ Social Security information is used by the IRS to validate 1095 submissions. Along with W-2 submissions, 1095’s are a good reason to reach out to employees to make sure that their name as it appears on their current Social Security card is up-to-date and correct, if necessary.
Know your deadlines.
Depending on how you will file your 1095’s there are a couple of deadlines to be aware of:
January 29, 2019 (optional!) If you are planning to take advantage of up to 50% discounts when combining W-2 and 1095 reporting with Aatrix, you will want to have both forms filed by this date. (ACA filing with the IRS will follow the dates below.)
February 28, 2019 – If filing with the IRS on paper, Form 1094 and copies of the 1095’s are due on this date.
March 4, 2019 – Copies of 1095 must be furnished to full-time employees or employees in an employer self-insured plans by this date.
April 1, 2019 – If filing electronically to the IRS, transmission is due on this date.
Be ready to respond to the IRS.
Beginning in 2017, the IRS started reviewing past ACA filings to determine if employers offered affordable minimum value group benefits to at least 70% of their full-time employees in 2015. Last year, 2016 came under the same scrutiny with the new minimum percent of at least 95%. Years 2017 and 2018 will follow in subsequent reviews.
If employers did not offer affordable coverage or didn’t provide minimal value, employees could obtain individual coverage on the exchange and qualified for a premium tax credit. If even one employee during the year qualified for the tax credit, the employer could be subject to the Employer Shared Responsibility Payment. The IRS will inform you of your liability for the payment in a letter – IRS Form 226J.
Have more questions about ACA reporting? Use this link below to join us for a free webinar, “Understand Your Responsibilities: an ACA Update for 2019” on January 30th. Theresa Mongiovi, a partner in the law firm of Brubaker Connaughton Goss & Lucarelli, will discuss
What is the current status of ACA reporting for employers?
What is the impact of Texas federal judge Reed O’Connor’s ruling on the constitutionality of the Affordable Care Act?
What is happening with State Exchanges as a result of the changes to the Affordable Care Act?
How to respond to IRS 226J “Assessment of Employer Shared Responsibility Payment” penalty letters.
What does the future hold for the Affordable Care Act?
As always, our team of consultants are ready to assist you in your ACA reporting needs. Contact your Account Manager or firstname.lastname@example.org for more information.
Upcoming Live Webinar: Topic: Understand Your Responsibilities – An ACA Update for 2019 Register Here | Date: Jan 30